There are multiple ways of structuring the economic system that society makes use of. In America, capitalism is the main structure of economic activity. Capitalism involves free markets that compete for business (Pettinger). Almost anyone is permitted to start their own business venture. The ultimate success or failure of a business rests on the shoulders and minds of the people that choose to start it. This economic model can be compared with socialism and communism. Communism is a more extreme form of socialism, Socialism is different from capitalism in that there is often little or no competition in the marketplace (Pettinger)
The division of labor and resources is typically handled by a government or other large entity (Pettinger) Communism follows similar practices but takes it to a further extreme by eliminating the need for money, Resources and methods of production are shared under communism, so money and personal possessions are not necessary Capitalism and socialism each present their own unique pros and cons, but capitalism has a much higher upside potential, Socialism is a structured market in which the resources and means of productions are owned by the governing body of an area (Pettinger), American economics feature elements of both capitalism and socialism.
The American government has some programs in which the resources and labor are allocated by the government However, there are also many private companies in America that handle business on their own and seek profits. Socialism, as a theory, makes sense, It seems reasonable to assume that a governing body is capable of making decisions about the allocation of resources and labor that would outperform the decisions of any single individual or private company. However, this model assumes that the governing body has the best interests of its citizens in mind.
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When a socialist system features a governing body that is seeking its own expansion and profits, then there is the potential that people living under the socialist system will be mistreated and abused, The success or failure of a socialist system rests on the institution or governing body that is tasked with allocating resources and labor. Is capitalism or socialism more efficient? This is a difficult question to answer, from a societal standpoint, people can argue that socialism is more efficient.
Resources and labor are meant to be divided up in an efficient manner that makes use of different talents and aptitudes. However, historical examples of socialism do not always prove that point. There have been instances in which the socialist system did not work well and caused many problems. Capitalism, on the other hand, can also be viewed from multiple viewpoints, From one perspective, it is beneficial because it is possible for a single person to amass a fortune under capitalism. There is nothing inherently wrong with disparities of income because the Bible mentions disparities in rewards and punishments for different behaviors.
Capitalism and socialism are two different ways of structuring an economy Capitalism often involves greater disparities between social classes Capitalism makes it possible for individuals to change social classes and accrue wealth, but the morality of their actions depends on how they choose to make use of the money that they earn. There is nothing intrinsically wrong with pursuing money (Grudem p33i)Theoretically, more money means that a person can do more good for other people (by giving to charities, churches, and other humanitarian missions) Therefore, capitalism is better for societies, provided they follow a morally responsible course of action with their wealth and resources.
